Fouling all our futures

by Serge Halimi

Chinese investors and British pensioners did not think on 20 April that the black tide off the coast of Louisiana would reach them so soon. Down in the Gulf of Mexico, 11 workers on an oilrig lost their lives, fishermen in St Louis Bay lost their livelihoods and everyone lost their precious environment and their brown pelicans. Far away from the fouled areas, the Beijing authorities and British pension funds suffered damage of a different kind: 48 % of the value of their BP shares was wiped out in just two months. In China – and in Kuwait and Singapore – prime investors would be wise to lose their enthusiasm for western oil companies (1).

The pension funds’ plight is of particular interest when European states, under pressure from the financial markets, are “reforming” (ie cutting) social security. The steady reduction in government spending on health and pensions predictably and purposely forced many workers to turn to private insurance or pension funds. In the UK, the pension funds were naturally tempted by the $59bn in annual dividends offered by BP, star of the London Stock Exchange. Eventually they came to depend on BP for one sixth of their income.

The return on the pension funds was all the more attractive because BP cut costs, by neglecting security measures where costly. But the US is not a no-go area or a little country whose president must always kowtow to a foreign multinational. It can defend itself against the destruction of its flora and its shores, and insist the polluter pays – $4,300 for every barrel of oil (159 litres) spilled at sea. This oil slick, which may turn out to be 17 times the size of the Exxon Valdez spill in Alaska, might cause BP’s shareholders to regret the minor savings their company made in order to increase its profits.

The absence of state-funded retirement means that the prosperity of UK workers in their old age is inexorably bound up with the fate of their pension funds. They are naturally dismayed by US retaliatory measures that have affected the value of BPstock and already substantially reduced the company’s credit rating. When President Barack Obama announced that the company would pay for all the damage caused by its recklessness, the former Labour minister Tom Watson expressed his concern: “This is now a serious crisis facing millions of pensioners in the UK.”

Take millions of men and women seeking security after working all their lives and turn them into greedy robots, closer to the directors of BP than the fishermen of Louisiana. That is the nature of the system, kept going by the misplaced loyalties which one crisis after another expose.